tv Squawk Box CNBC October 31, 2012 6:00am-9:00am EDT
good morning, everyone. welcome to "squawk box." i'm beckerman along with joe kernen and andrew ross sorkin. we'll find out what kind of progress is being made in new jersey, but this is going to be slow going. a lot of damage and it's going to take some time to dig out from this. most of lower manhattan is without power, too. getting back to business today. and we will talk to one of the city's biggest landlords, he owns buildings in battery park, which is right in zone a. he also has property on the brooklyn waterfront and much more around the tristate area. he says the damage is already in the tens of millions of dollars, but this is going to be some huge numbers when you start adding up the entire tally. coming up at 7:30 a.m., daniel amond will talk to us first. it is halloween, but not in the
state of new jersey, because the governor has postponed halloween here. he's going to be pushing it back to another day. >> i'm not sure it's halloween in a lot of places. we're supposed to have a halloween party at my house tonight. my kids are supposed to be thing 1 and thing 2. i'm supposed to be cat in the hat. and my wife is supposed to be sally. that's what she wanted to be. >> sally is who? >> one of the kids. one of kids. let's get to lower manhattan. lower manhattan is springing to life today after super storm sandy hit the area, flooding the battery. the new york stock exchange is set to ring its opening bell today after being closed. for the past two days, scott cohn reports from lower manhattan right now. scott? >> good morning, andrew. the red, white, and blue lights behind me are symbolic at the new york stock exchange. they came on about 10:30 monday night as the storm was just make
its way through here as people were frantically trying to keep water out, ultimately in vain. but power always stayed on here. this building always stayed dry. that's an important symbol. the question is whether it can be more of a symbol today as they try to get the markets back up and running. we've seen a lot of people arrive here, technicians and so on trying to make sure that their connections from the exchange to the outside world, wherever their firms are, wherever their trading desks are are going to work. but it's going to be a huge challenge. other than this little island of electricity here, there is no electricity from here all the way up to midtown manhattan, and that is a problem. electricity is just the start of it. the subways are still not running and won't be for quite some time there. are still road outages, telecommunications, trying to get a cell phone call through
from down here is a spotty proposition at best. so if they can get a full day of trading in here, it will be an accomplishment. what the markets do after two days of being closed through this historic disaster is a whole other issue. guys? >> markets called higher, i think. >> i just can't imagine how people are going the get down there. we have friends who are living downtown. we had like a makeshift i don't know what in our apartment last night because we had so many people who lived downtown who had no electricity, who had no lights, who had no power. unless you take a taxicab -- there's some buses running. >> i think car service will have to get the skeleton crew in. if you tom brady updates from the port authority on this, i mean, this is a situation where there is still so much it's going to take to get things back online. limited service at newark airport and at jfk. if you're planning on flying, you need to make sure that flight will still go off as
planned. laguardia is closed. >> 18,000 flights are now off. incredible number. >> and one of our producers can't get back until friday now. the only thing i know is the turnpike is now open. that was different. >> the parkway is open. >> the gw is open. lincoln tunnel. >> first ferries will be running starting at 7:00 a.m., but it's limited service again. anybody trying to get into manhattan -- >> i think the path train is also -- >> it's suspended. >> suspended indefinitely. >> it's got quite a bit of issues that are running with it. they are running buses in new york city. it will be almost like normal and buses will be free because of all the disruptions with the other transportation systems. >> i'd like to see a satellite shot at night of new jersey. even driving up to the studio this morning, it's dark.
no traffic lights, no nothing. there's a couple of things that are open around the area out there, but they must have generators. very little on the shelves. a lot of people, a lot of people. the eye of hurricane sandy hit the jersey shore hard, wiping out boardwalks, businesses as well as homes. millions still without power. president obama is going to survey the damage today with governor christie, and coming in this morning, i heard -- i was listening to the radio and i heard a bunch of sounds from christie. >> he had gone to the shore yesterday. >> giving people hugs. the boardwalk is gone in a lot of places. we showed some amusement rides. kayla has spent two days in cape may. she's moved north to atlantic city where the damage is also extensive. hey, kayla. >> hey, joe.
the president is scheduled to visit atlantic city here alongside governor christie. we'll be taking that live as it occurs. the brunt of the storm was born by the jersey shore. the entire state of new jersey still reeling. two million residents without power. and governor christie calling the damage incalculable. that's the job of officials as they start figuring out how to start repairing the damage that has occurred. some experts around the industry have tried to start putting a number on this. a disaster modelling agency forecast losses between ten and 20 billion dollars. a former economist with the international trade commission scored that much higher with losses up to $45 billion from hurricane sandy. tease are very early estimates. and surely, only to grow. we should also note that roughly half of that total loss number
will be insured losses. if you look at the top insurers in the state of new jersey, no doubt many companies that will be put to work here. state farm the largest in the home and commercial insurers here in new jersey. about 11% market share. liberty mutual and allstate just below that with about 8%, and then chubb falling just below that with just over 7%. we should also note that a report from credit sweet said that as losses start too get into the $20 billion and $30 billion, allstate and chubb will be set to benefit from some of that, though we should note with the markets just opening today, those are definitely going to be some stocks that people will be watching as the market reopens and some of this damage is to be expected. of course, residents no doubt still reeling, and governor christie said fema will be a strong force here, no doubt, for many, many months. and he kept stressing that word, noting that this will be a very long recovery process. people are just starting to try
and put the number on very early estimates. back to you. >> kayla, it looks like we're taking a few hits from your shot, but it is surprising to see the lights behind you. i don't know if you can still hear us, kayla. have they had these lights on the whole time with generators? is that a new change? looks like we're losing kayla's shot. >> reporter: they do have massive generators that have been powering those casinos. bally's has been housing essential personnel like hospital workers and police that are here in atlantic city. most of the traffic lights are back on. there are some that are still out. actually, there's a lot of power. yesterday we were broadcasting from outside caesar's. i spoke to someone there. their casino was up, and all the machines were on. kelly clarkson was playing outside on the speakers. but it's a very eerie feeling. there's really no one here. still mandatory evacuation. residents starting to trickle
back. >> obviously we're taking some hits with that. kayla is there. you can see the lights behind her. but it is a very tricky situation. >> that's probably our power, not theirs. >> kayla will continue with coverage. she's been down in cape may. >> she had something orange on yesterday. today she's got the green. she was totally ready for this outdoor reporting. >> been bringing us great updates. >> she dade great job too last year with irene. i think she was in north carolina. >> anyway, we'll check back in with kayla later this morning. let's also take a look at the markets. the futures are indicated higher after all the concerns that have been out there. the s&p futures up by more than 9.5 points. the dow futures are up by 65 points. not a lot of news stories that have been coming through. you've heard some earnings here and there. yesterday we had ford out early with better than expected numbers early. and there are a few other stories that have been out there, too. you guys see the ubs story? >> 10,000 jobs. >> 10,000 jobs this they were laying off.
a lot of people found out when they showed up for work in london and their cards didn't work. other people found out because their e-mail kept bouncing back. that's the worst situation i've ever heard. it's not going to get nearly enough attention because of all the other things that are happening out there. >> did you see the other big merger yesterday? disney and "star wars." >> $4.1 billion. >> i almost didn't open it because the e-mail said "star wars." i was like oh, my god, i don't have time for essential e-mails at this point. but that is a huge deal. this is a big deal for eiger. bought pixar. added on marvel entertainment. >> your dad ought to get involved with this. disney-owned "star wars"? a huge film market out there. >> at&t can't buy stupid t-mobile. and you've seen -- you've seen on the simpsons how they refer to disney as this -- they
already call it a monopoly and an evil empire. now they're going to own "star wars" on top of everything else. well, what don't they own? >> i like your take. i like your take. >> d.c. comics? they annoyanunced one more in 2. >> that's great news. i love it. i want the theme parks. i want all of this. george lucas, who is 68, says he thinks "star wars" should live beyond him. >> i guess you can't really connect the dots. we have some theme parks that aren't going to have any content whatsoever to draw people in. can't you go with me on this? >> you know what? i'm excited about this. i like how you think about buying everything. >> i stop this. >> the last time you saw a company with a single shareholder worth $4.1 billion.
that's remarkable. >> i don't know what the breakdown is. >> now that steve jobs trust -- >> you asked when was the last time. >> 7.8, i think. i'm working on this. i've already contacted. >> you're trying to break up the deal? >> i've contacted some antitrust people to see if there's any merits to the case. >> this could actually be a good thing. >> the guy's body is frozen somewhere, too. he's going to come back over this. it doesn't matter. people think that. he's going to come back and all entertainment -- you're going to have the file a motion with disney to have any type of fun. with walt himself. talk to you father. >> indiana jones. >> why were you against the at&t-t-mobile deal but you think
this is fine? >> i think there's a huge number of people that make films. >> think about if you're designing rides and you've already got "cars" and "toy story" and "snow white." why stick "star wars" into that? >> i think this still should be putting the kaibosh. >> i think we're doing just fine. >> oh, it's not going to work. we're stopping this deal. take a look right now, you're going to see oil prices are a little higher. they were up about 76 cents. the ten-year note right now, bonds trading back on as usual today. 1.763%. the euro is at 1:30. the swiss franc is up slightly.
gold prices this morning -- >> they'll never get spiderman. ever. they've got the ride. >> it is time for global markets report. kelly evans is standing by in lond london. kelly, you want to weigh in on this? >> becky, good morning. i'll let you guys talk over the disney deal for the time being. but i do want to just mention as we start to look ahead to markets reopening in the u.s. why we actually are seeing such a strong move in dow futures that could continue over to the open of the session today. it has a lot to do with the mood that's coming out of asia and europe, and surprisingly enough, it has to do with earnings that are stronger than expected, despite the weak headlines about macro factors. i wanted to show you the asian markets because they started the rally this morning. apple supplier, fuji heavy industries, icbc, all of them helping to lift sentiment across the market. the china pmi might also be a
factor because that's going to be a key one if it does rebound above that 50 level. now take a look at what's happening across the european market. the xetra dax in germany up. the ibex 35 is up better than 1%. we did see some weaker moves earlier in the week. the fotse 100 is just fractionally negative. you were just talk about ubs. incredible story there with people showing up to work to find out that they had been laid off. take a look at its rivals. shares are down nearly 4% after barclays comes out with third quarter results. about a 23% drop in profit from a year earlier. investors aren't really encouraged by the details as they look through this report and barclays will be one to watch going forward. spain's second biggest bank is seeing shares up 2% despite a
big drop in nine months profit. that gives you a sense of the kind of factors that are driving activity today. this is an area that's in focus today and we're seeing green across the board. it's not just because of the sentiment that i earlier mentioned. it also has to do with the fact that investors are looking at a lot of these names. they're not likely to have to pay out a significant amount in claims. and in fact, industry-wide, this could help soak up some of the excess surplus that we're seeing. not necessarily going to be brought in here. broadly speaking, a firmer, a harder market will support these guys more than paying out the claims as likely to hit them for the time being. on that note, back over to you. >> "star wars" is dated to me. >> are you kidding? >> they look like plastic, the things with the leg. >> they've redone them. have you seen the new ones? >> that's dated. jurassic park. this is like buying an old
edsall for something. >> it's a special time. >> a countermove for us. "lord of the rings" and maybe do something with warner brothers. we will battle the dated "star wars" '70s rides with something new. the hobbit. middle earth. the shire. there is a ride. a lucas ride. >> there is already a lucas ride. >> eiger was talking to george lucas as they were talking about this ride. >> you know this? >> i know this to be true. >> where did you find this out? >> i do a little bit of reporting. >> well, since when? >> there was a storm yesterday. >> they were talking about the ride and they started thinking about it. >> i think lucas possibly reported in a couple of places. >> this is tired old
merchandise. mark hamill with that haircut. >> you not sell this short. i do agree with you that a "lord of the rings" tie-up would be a good idea. >> you don't understand what we're talking about. >> viewers will understand this, too. your talking points are always one day ahead. the journal has to actually answer you and what you say the day before because you are -- t >> it just means they're watching us. >> we know that liberals worried that president obama may lose next week, but are they so panicky that they want to suggest that mitt romney and the republicans are against disaster relief? the one thing you came up with yesterday was that romney wants to cut fema. >> i saw that on twitter. everybody was talking about it. >> there's some good stuff on the objective buzz feed. >> i saw that, too.
objective guys. i follow them. and i was reading it and thinking this is like awful. i don't need to see any of this. coming up, getting ready for trading. we'll reopen after being off for two days. plus, sandy's path of destruction disrupting the campaign trail. but how will the superstorm impact the election? does this natural disaster give either party the damage? that's next on "squawk box." [ male announcer ] you are a business pro.
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welcome back, everybody. the u.s. equities futures are predicted higher ahead of a normal resumption of trading. you see the futures are up about a half a percent. s&p futures are even stronger up by .7 of a percent. nasdaq futures up by about half a percent as well. we're trying to figure out what is next for the region that is dealing with cleanup. let's get the forecast from maria la rosa. >> we still have a big area of influence. what you're not seeing is heavy showers and thunderstorms. still see that circulation. so wind still a component in a wide area. from chicago to new york, 20 to 30-mile-per-hour winds. perhaps as high as 50 this afternoon. you can see by this evening and into tomorrow morning, still looking at a wide area. 20 to 30-mile-per-hour winds, including new york into boston
and along the great lakes. the great lakes still expecting to see high waves because of the winds off of lake michigan, potentially some lake flooding here as well. the waves could be ten to 14 feet. as far as the rainfall, here and there from new york into pittsburgh. back to you. >> thank you. hopefully there won't be any travel problems today for the president. he's coming down to new jersey. he's going to join governor chris christie in viewing the storm's damage, talking with citizens who are recovering from the storm and thanking the first responders who put their lives at risk to protect their communities. as a result, the president is not going to participate in the campaign event that had been scheduled today in ohio. joining us now from washington with more on how sandy is going to impact the election is our chief washington correspondent john harwood. one thing i keep hearing, john, just aside from this, is all these first responders and
volunteers going in to save people that ignored what they were supposed to do, and you've still got to go in with a smile on your face, and it's like here you are, again. you know, up on top of a dresser with eight feet of water, when you knew full well that you should have left. and we will save you again. what are you going to do? you can't get mad and say i'm not going to tell you, but people don't leave, john. >> that's what governor work is all about. it's not easy. you've got to get people to do things they don't want to do. chris christie was pretty explicit in calling out people who ignored those warnings, and he'll keep doing that, and president obama is going to do whatever he can to help him, because you were talking a moment ago, joe, about instead of being on the campaign trail, what would be a better campaign appearance for the final days of the campaign than president obama appearing in a mutually
supportive way with the republican keynote speaker? i can't imagine. >> yeah, and i heard people saying that christie -- i mean, it's a terrible tape because he's a sincere, honest guy. but people are saying he's showing off for 2016. people will say anything, john. i don't see anything but sincerity and a guy being a governor here at this point. but the motivations -- there was someone talking butt romney picked up a couple of relief supplies and was moving it, so they made fun of him for doing that too or something, did you see that? >> yeah, i saw that. what's mitt romney supposed to do? he can't campaign in a partisan sense because it doesn't look very good at the moment. i don't see anything wrong with him doing what he did yesterday, or returning to the campaign trail today. the guy is running for president. he's been doing it for several years and this is the home
stretch. >> i get to see everything, and some of it, you've got to be mature enough to not be emotionally affected by some of the stuff that you see. but it's almost getting to the point -- there's certain newspapers i don't read anymore. i just can't. i used to read them to know what the enemy was thinking. but now i can't. i'm just about there with twitter. just so you know. i'm about there. >> i'm addicted. >> john, did you see that mayor bloomberg apparently -- the president said would like to come to new york city and mayor bloomberg said please don't in this case? couldn't spare the police. i wonder if you're governor christie, whether you could have said the same thing and whether politics does play into all of this. >> chris christie, i think he wants to be president at some point. will it be better for him to run for president after a second obama term than a first romney term? yes. do i also think he's sincere
doing his job? yes. i think it's one of those cases by chris christie doing what he sees as the right thing, working on this disaster and trying to fix it, or ameliorate it the best he can, it's good for his long-term politics. >> kayla pointed out, too, this is a problem that is beginning to be around for months and months. and if that's the case, you probably want the make sure that you are keeping good relations with washington and keeping good relations with anybody supplying money. >> no question about it whatsoever. so this is just one of those circumstances that i think falls in a way that benefits president obama, although i have the say i don't think there's a huge electoral benefit here. i don't think a lot of votes are going to switch because the president is doing his job here. but it can't hurt. >> john, thank you so much. we'll talk to you soon. got a lot of things going on in the next week. coming up, we'll focus on the markets ahead of the
reopening of wall street. plus, saving the crew of hms bounty. the u.s. coast guard called into action to rescue one of the most fapous ships in the world. we'll talk to a coast guard captain about that rescue and when we can see the ports reopening in new york and new jersey. coming right back after this. what are you doing? work? work. cdw configured these lenovo thinkpad ultrabooks with intel core i7 processors. so, we can work anywhere. anywhere? sure - on the beach, in the woods, at the lake. what about on the green? let's not get ahead of ourselves. oh!!!
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>> you've missed the market? >> there's something about being a business reporter and having no stock trading that makes me wish that there was stock trading again, isn't there? >> i'm actually eager for earnings to pick back up again, which is kind of crazy. >> that is really warped. plenty of news for investors to react to when trading begins later this morning. for now, walt disney is buying lucas films, the company that brought the world "star wars" for a little over $4 billion is what they're paying in cash and stock. the deal means that new "star wars" films, starring with "star wars episode 7" will be disney, and the price is similar to what disney paid -- building this anti- -- or this monopolistic president to acquire marvel. >> they made $1.4 billion on "the avengers" alone.
you talk about can you make your money back. i mean, that's gross. >> it is gross. >> just unbelievable how much money they can make. >> i talked to michael eisner -- >> obnoxious "small world" and then darth vader. >> michael eisner years ago, this was maybe ten years ago, even longer. he said that the princesses -- the princesses alone were a $5 billion a year franchise for them and this was probably going back ten years. so what they need is to keep new material all the time that they can turn around because they know how to market it. >> "indiana jones", too. >> this is formidable. >> oh, good point. >> john in audio. >> disney now has another princess to add. princess leia.
actually, two. >> that's your case. >> exactly. exactly. even little mermaid. you can throw her in there basically. >> she is one of the princesses. a rather popular one for the little kids. >> princess leia was like debbie reynolds' daughter. she had more stuff going on when she was filming this -- yeah, carrie fisher. eddie fisher, debbie reynolds. you know that, right? >> yeah, but not really. >> i don't think you do. general motors has fined ford and chrysler -- no, not really. that's basically what it would be like. >> selling the properties short. >> i'm okay with this deal. i'm not okay with the book deal we were talking about the other day. >> some gm numbers are expected in about an hour. gm is expected to earn 60 cents
a share on revenue of $35.7 billion. gm, don't they have loss -- i mean, if they can't make money at this point, they ought to be able to because i don't think they have to pay taxes again. that's another way we sort of don't get our money out of gm. now we'll be watching facebook. about 230 million shares held by ples became employees became eligible for sale on sunday. equity trading will try to get back to normal today after superstorm sandy forced the new york stock exchange and the nasdaq to wait out the storm and stay close from the last two days. if investors areomin back today, they may be wondering whether there's going to be extra volatility. ira harris joins us right now from the cme group in chicago. what's the sense you get? i've actually been surprised by how orderly all of this has been
to date. >> it has been orderly, but i think that's because we've been taking our reads off of the european markets, which have held up pretty well. better than well. and where we are positioned when the storm hit -- well, let me say my deepest sympathies for everybody out on the east coast who has to deal with this. especially, joe, ken langone who was sick in the hospital with pneumonia. >> oh, i didn't know that. >> but let's go with the stocks. we're at such critical junctures here. it's an amazing thing, when i was going through my work the last couple days, to see the convergence of 200 moving day averages. it's a mean reversion. so we are coming back to an interesting stop point. you have the nasdaq 100 hovering on the 200 day. you have so many of the currency markets. everything is so converged here
that i think it will become very interesting. it wouldn't surprise me to see a really harsh reality because i think there's a lot of money that's been parked on the sidelines and they're goingbuy type of stimulus. today's rally wouldn't surprise me whatsoever. >> once you get through, let's say the next day or two of trading, where do you think things stand with the market? we had several bad days of trading before things closed down because of the storm. >> we did. and again, what i was reacting to -- and we talked about this. good news will be good news and bad news will be bad news, meaning that we've had bad earnings, the markets finally performed to the bad earnings, which told us that we're probably as priced in as we're going to get on the quantitative ease. monetary policy has been monetary policy, but it's done what it's done. now the market is going to have to sfand or fa-- stand or fall s
own. we also have to remember about the fiscal cliff. it goes back to bernanke actually throwing it down at that april press conference after the fomc meeting in april. i'd like the hear more. they've been quite of quiet. i know it's election time. but they've put their foot in this game in so many other ways. the fiscal cliff, he brought it out to the forefront. everybody's picked up on it. let's see what we have in store. the elections will bear a lot on what we're going to see. >> ira, thank you very much. my favorite tweet today, even though you're not reading twitter anymore, my favorite tweet this morning was "so now that the storm has united america, there's no way we g over the fiscal cliff, right." sarcasm noted at the end. >> several years ago, "star wars" ride had no line. i mean, why would lucas decide to sell out right now?
this may be -- go ahead, buy it. >> i have seen people tweeting. >> now i'm withdrawing my antitrust complaint. >> you are selling "star wars" short, my friend. it's powerful for people my age. >> the special effects. i didn't watch it until i got old. and it is tired. the new ones are good. >> you didn't wait in line as a 5 or 6-year-old wearing a chewbacca t-shirt. >> ira mentioned it, he was discharged, apparently doing better. "the wall street journal" reporting that he was discharged at tuesday morning at 5:30 in the morning. but he is recovering from pneumonia. ken, if you're watching, we send you our very best. if you have comments, shoot us
an e-mail. still ahead, we've got markets set to resume trading after a two-day shutdown. we'll tell you what to expect at the opening bell. plus, members of the coast guard among the first responders, putting their lives on the line to rescue people. we'll talk to the coast guard's commander of the new york section about the rescue efforts and the lives still at risk. this is america.
the nasdaq getting ready for business on this final day of october. it's important that it opens given that it's the final day. will the market continue to be resilient in the aftermath of the storm? joining us now from houston, lee partridge, the chief investment officer of stanley partners. we thank you for joining us this morning. what do you expect today? a lot of volume? >> a trick or a treat. >> i like that. a trick or a treat. i'm going with joe here. trick or treat? >> great question. well, happy halloween, first of all. i would say given the fact that we've had market closures the first two days, we'll probably have some catch-up activity today. friday we're going to have the unemployment report, which is something everybody is anticipating. i wouldn't be surprised if we do have a heavy volume today. >> in terms of your expectations directionally, we have the election coming up. we're a week away at this point. is there an argument to be made that actually people are going to sit on the sidelines to wait to see what happens next?
>> well, first of all, today, as i said, is probably a rebalancing day and there's a lot of pent up activity that needs to go through the system. beyond that, when we look at the challenges that we're facing, we have a huge debt overhang. we're facing a fiscal cliff. we have the elections before us. tax policy, fiscal policy is a big question mark in people's minds. so i think that the biased long-term between the months of november and the end of year, it's probably downward as we adjust to the out of the money risks that we're facing right now. >> because between the fiscal cliff -- how big an issue is the tax policy? meaning do you sell now try to take advantage of where we are? >> our debt to gdp right now is 100%. and we're growing that at about 8% per year. if we don't do something to close the gap between what we make and what we spend, we know that we're on a path of unsustainability. right now the gang of eight and
the presidency, everybody that's looking at this problem has to make some pretty dramatic moves pretty quickly to avoid what will otherwise be a hard landing if these bush tax cuts do expire without being addressed. >> i know we're making a lot of the storm because we are in the midst of the storm itself here. are there any investments one way or the other as a result of the storm that you will be making or taking off the table? >> no, i think it's a great question. our hearts in houston -- this is one of the rare time where is a hurricane has hit and we're enjoying sunny weather and other parts of the country are really suffering. so our hearts are with you. that said, i would make the point that a lot of the storm effect has already been priced in. it's going to be very difficult to front run this. and material stocks or home builder stocks, even some of the insurers. the one thing a lot of people are bearish on insurers, they're looking at the pnc companies as well as the reinsurers. if you look at how much the price is adjusted going into the storm, meaning the equity
markets sold off pretty considerably in anticipation of heavy losses. now it looks like a time where there are rates on line or the amount that they're charging for the same insurance is actually going to be coming at a premium off a a fairly low base and a stock price. i don't think it's an easy trade to make, but if anything, i think being a little bit of a contrarian here might make some sense. >> we're going to leave it there. we thank you for your perspective this morning. >> thank you very much. coming up, the u.s. coast guard in action. they were called on to save the crew of the hms bounty. we're going to talk to the captain of the port of new york and new jersey about damage and when the big ships will start to move again. "squawk box" coming right back. [ male announcer ] it's the question we ask ourselves every day. is it the safest, the most efficient? the kind of vehicle to move not just people... but an industry forward? are we there yet? are we really? [ male announcer ] are we there yet? we are, for now. introducing the all-new seven passenger gl.
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the futures is where the indication is this morning. the futures did trade. but no stock trading, up 72 points or so on the industrials. ten points for the s&p 500. the u.s. coast guard is still searching for the body of the missing captain of the sunken hms bounty, one of the most famous ships in the world. might recall it was built for the 1962 film mutiny on the bounty, which was a big brando vehicle, later featured in the movie pirates of the caribbean. joining us now on the squawk news line is the u.s. coast guard, he is the commander of
sector new york. and captain of the port of new jersey in new york. he's with us from the coast guard's command center in staten island. just so many different operations have been conducted, i'm sure, captain, in the last couple of days. can you tell us about some of them, please. >> yeah, it's actually been quite an amazing couple of days as i'm sure you've been following the events here. started with the initial storm surge. we're getting reports from people in distress over in the brooklyn area, coney island and staten island, as well, people stranded in their homes. we were able to launch some helicopters and actually rescue people from their homes in distress. the water begins receding and then very quickly we got around yesterday to doing some initial damage assessments. and we quickly shifted into environmental response mode.
there's several spills, oil spills we're chasing around the harbor right now. but we've got the resources flowing, and we're on top of them and we're responding with everything we've got right now. it's its own precedented event. this is what we do, we respond to hurricanes just like this all the time. >> you would say it was really quite an exception to the rule for people in areas they shouldn't have been. you can't get everyone to cooperate, but most people did cooperate, is that fair to say? >> well, certainly i think the people that didn't cooperate probably wish they had at this point. i don't know if i could put a number on how many did or didn't, but, you know, we have hurricane irene so fresh in our minds from last year, so i think people generally did take the warnings very seriously and did heed them. that's a good thing. in many ways, we were prepared for this. just because of irene last year, it's a little bit of a blessing
irene came through last year, probably not the way people felt at the time, but certainly now this port was ready for whatever this hurricane threw at us. >> i guess, you know, the media has done a lot with the bounty, it had to be an odd set of circumstances that brought about the sinking of this old ship that was used in filming of the movie. what can you tell us about what happened there. >> i'm afraid i can't tell you a whole lot about what happened there other than i know coast guard responded. that happened off the north carolina coast? >> yeah, it was moving somewhere, but to be caught up in just bizarre. sometimes the news is stranger than fiction. but yeah, i know apparently i just saw on the intro to you that the captain of that ship is, i guess, they're still searching for the body. i think most of the people were -- >> 16 of the 18 were found and rescued, one was brought in and
i think had been in serious condition. they had not been able to resuscitate her last i'd heard. >> what's going on today, captain? what's left today, tomorrow, and the next day? whatever calls you get, i guess? >> well, the focus now really is on the response and recovery. and of course, if any search and rescue cases come in, obviously we'll respond to those. we're still prepared to do that. but for the most part, the big focus now is really the recovery effort and reconstituting the port and marine transportation system. we need to get the channel surveyed, we need to verify all the navigation is in place. a lot of that work was able to get started yesterday. all the shipping, the facilities land side have to make sure they're ready to receive the ships when they do come in. our biggest focus right now is getting the ports reconstituted as quickly as possible. but we have to do it safely because obviously there's obstructions in the channel we don't know about, we could have
a tank ship or cruise ship run aground where there previously wasn't a hazardous navigation. that's our biggest focus right now. >> we're in debt, obviously, first responders, we can never thank you guys enough for putting it all on the line for the rest of us. and we appreciate your time today, as well. >> thanks for your support. >> okay. we should say sandy's bounty, the bounty's victims was unresponsive. 14 of 16 rescued, she was responsive and they were not able to recover her. and they are still searching for the captain. when we come back, we are expecting quarterly results from general motors at 7:30 a.m. eastern time. and markets are set to resume trading at 9:30 a.m. after a two-day shutdown. we'll get a rundown after this.
getting wall street back to business. we are assessing the damage along sandy's path. and what investors are in for as the stock exchange gets ready to open this morning. . plus, the latest update on the cost of recovery as east coast businesses and residents get back on their feet. gm gets set to report the quarterly earnings. phil lebeau breaks down the numbers and gets reaction from the auto giant's cfo as the second hour of "squawk box" begins right now. good morning. welcome to "squawk box" on cnbc. as we get set for the markets to
reopen for the first time this week, a look at the futures. dow could open up about 64 points higher, s&p 500 about ten points higher, nasdaq up, as well. let's talk about the headlines this morning. we can call it merger wednesday since we really didn't have a monday this week. the big news, walt disney films buying lucas film, for a little over $4 billion in cash and stock. disney plans to make new star wars films going fard, starting with episode seven in 2015. becky's very happy about it, joe, a little less so. >> they won't make any of the movies -- they won't make -- >> going forward. see, i figured they were only going to make them in the future. >> well, in "star wars" they did. >> i don't know any of the acto actors. >> liam neeson. >> i don't know.
hayden christian, who is he? >> christianson. he's a big actor. >> natalie portman? >> you know of her? >> and mcgregor. >> something like that. >> obe. >> i don't know who that is. i missed out. that's the problem. >> yeah. >> i'm like -- yeah. i like all the audio they're doing when we have breaks. >> breaks. >> they play disney. the stuff you get a cavity from and then you have darth vader's voice. >> i'm an indiana jones fan. part of this deal. >> they get that too. >> they get that too. they have a tie-up with viacom and paramount, a distribution deal that makes it harder. >> there are raiders of the lost ark rides. >> at the mgm studios down there, is that possible? >> i don't know.
>> your kids are -- >> we will do that. >> you will. >> see it all. >> orlando, it's amazing. that's why it's there, sort of, because of all these. >> it is. he snuck around and bought all the orange grove farms without telling anybody what he was doing and put this together. >> among a lot of things he did in this diabolical. he's still around. he's coming back. he will and he will preside over this. >> he's not on ice, we all think he is. >> if i read it -- >> anything in the newspapers must be true. >> he's telling us to go. >> it is going to be business getting back to usual today. lower manhattan's going to be returning to life somewhat slowly, but the nyse is set to ring the opening bell today after being closed for two days. scott joins us from lower manhattan, this could take a little while. we've been seeing there aren't any lights down there. the exchange is lit up and a great beacon of hope for people.
this could take a bit of time for things to get back to normal. >> reporter: that's right. business as usual is very much a relative term, becky. and you're right, as well, that there is -- there are lights on at the new york stock exchange. they've been on throughout. but anywhere outside of that, it is a very bizarre scene in lower manhattan because there is traffic, but no traffic lights. no street lights, no stores open, but people are coming in to work and it's a testament to them that they've gotten down here. a couple hundred people that it will take to have a trade floor going at the new york stock exchange. the issue is every place else. all of the firms that need to be up and running and sending in orders to that trading floor. today and for the foreseeable future, it is not going to be a normal commute. -- of the white hall street subway station which --
>> all right. >> pretty much anybody coming to lower -- >> we are taking a lot of hits trying to hear from scott. we will either reestablish that connection or get him on the phone to give us more of an update. but again, he's pointing out while the stock market is opening today, both the new york stock exchange and the nasdaq, that area of lower manhattan is still a disaster area. there is -- there are lights out throughout the entire area. subways are not going to be running any time soon. but, again, business will be open at the new york stock exchange today, trading will open at 9:30 as normal. >> all right. let's get more on how the markets may react to the extended closure. joining us now from new york. tom, i don't know how much of the time we have allotted for you. you want to talk about how we open after a couple of days of not trading versus what you normally do to tell us about the equity markets and.
they're going to open after a couple of days. what do you expect today? and how are we looking medium term? >> well, we've gotten different reports. i imagine that people are going to be pretty anxious today because it's the end of the month. we've had two days where the market hasn't been open. and then we've got a lot more information about the impact of this hurricane. i think there's going to be a lot of strategies put to work and a lot of window dressing that happens at the end of the month and end of the tax year for mutual funds, as well. but i think this will be viewed as an opportunity. one, the damage is not nearly as great as we thought. i think it's a lot of people affected, but we know the cost in lives and economic damage might be less than katrina. i know our insurance analyst has talked about the size of the liability being half, which is good news. and i think there's going to be some affect on auto sales and consumer retail spending. but, again, if those stocks take
a dip, that's going to be a pretty big opportunity. because we know when you have to fix a broken window you end up with more spending. overall, this could be a boost to the economy. i think it's going to be viewed as an opportunity. i think we're seeing in some of the premarket activity. >> i never know really whether to believe that or not. i see with insurance companies and i've seen the case made, the broken window case that you eventually have to fix it. net net, replacing things that may have been -- didn't need replacing and using capital to do that, i can't believe that, you know, spending $20 billion on what you didn't have to do before can be net net be good long-term. is that really true? is that the case that economists make? >> well, i think it depends on how much credit is involved. in other words, it involves really construction activity and things that require durable spending. that actually is stimulative because historically durable good spending has a credit multiplier. for every dollar you have to
sort of build something, you're sort of creating a lot of activity on the whole supply chain. and we know there's going to be a lot of reconstruction, but in the case of autos, about 23% of all auto sales take place on that northeastern corridor. and if you include sort of the midwest, parts of ohio, et cetera, it's about a third of auto sales have been affected. when you think about scrap rate, the need to replace and repair cars, that's going to really trigger a lot of activity. and if there's people who have been sitting and thinking they've been wanting the excuse to sort of have to replace a car now if it's been damaged, that is the excuse. >> i know, but you wouldn't go just rebuild a city, tear it down and rebuild it to stimulate economic activity. that's the old, you know, i've had people argue digging a hole and filling it back up. i don't know. i think sooner or later, you know, we don't want a bunch. it would not be good for the economy to have hurricane after hurricane and all the rebuilding that goes into it. so i don't know why it would be good for just one. >> correct.
>> with everything else in mind, we've got the election coming up on tuesday, we've got china, europe, all the same things we had before the last couple of days, where are you in terms of, you know, qe-3. we've got valuations. >> well, i think a lot of the factors that caused confusion are still at work. there's a lot of uncertainty because of the fiscal cliff and the election's coming up. that's keeping investors are from having a lot of conviction. but i think they have to look and think about a couple of things. one is the credit markets, especially corporate credit and high yield have not only been wide open in terms of liquidity, but the level of their spreads has told us that stocks need to catch up. and you can't really sustain such a wide valuation gap. the p/e ratio is over 15 1/2 times. the stock market at about 13 times. and it's really only the second time in history stocks have been
this cheap. and the credit markets are wide open. not a matter of poor liquidity there. and when you think about global news, i think the news out of europe has been not as bad as people expected. and our team thinks it was a game changer. they believe that the size of the fat tail has actually shrunk. and when you think about china, there's good news. as long as we see party leadership and progress in there, we can feel comfortable they'll take additional easing measures. i think this is a time investors really have to say, look, we have some uncertainty, we're going to get through it with the elections. and with the fiscal cliff, there's a commitment to try to avoid it. a lot of these dips need to be bought into year end. >> do you care who wins on tuesday? >> well, i can tell you with the market sort of response would be. i think that in general, markets would prefer a republican victory because i think it provides more incentives for businesses to bring capital back
here. and i think in general, there'd probably be a view that government would be potentially shrinking. short-term, about what would happen with the fed. and i don't think that a reelection of obama is necessarily much worse for markets, but it is less positive in terms of the markets. >> i'm seeing both sides. i'm seeing people that -- people that just love, i don't know, spending ahead. and worry about austerity and if romney gets elected, talking about austerity, in the same boat as europe and he's going to turn off the federal reserve. and that's amazing to me that as we hurdle toward 40% of gdp being spent on government entitlements by whatever year, but it's coming if we don't curb things. i would think that curbing that near term would be a positive. but i see people arguing that
he'd be cutting off the punch bowl, romney, if he were elected. >> well, you know, that's a great question. and i think in terms of timing, you know, i think it would be unrealistic for a new president to make one of his first 100 days act to change the fed. >> so we decided we like bernanke then? so qe-3, the way to say that romney won't be negative for the markets is by saying he won't do anything to bernanke right away? so we do like qe-3? >> you have to remember -- households, corporate cash balances are over $1.5 trillion, at a record balance in the third quarter, just massive cash balances building, and they're going to applaud an idea that maybe government spending and deficits are under control. that's going to unleash a lot of that savings. and when we think about households. u.s. household wealth is really
the greatest globally. i don't have the exact number, it's over $50 trillion. and again, if households feel there is going to be fiscal, you know, balance. this is a very different situation when you compare u.s. versus europe. because the health of the private sector. corporates in such great shape today. >> are you saying the market's going to go up no matter what? no matter who is elected? and does the fiscal cliff weigh in at any point? or is that something you assume you will find a solution to? >> well, the fiscal cliff, it's incredibly important for congress to avoid a fiscal cliff. i think it's just sort of a gamble no one wants to take. but we're really building a base case that the fiscal cliff is essentially blunted. we have about a third of it actually happening next year. and that 1.6% drag is pretty comparable to the fiscal drag we've seen from state, local, federal in 2011, 2012. >> all right. tom, thank you.
we appreciate it. >> thank you. >> it's good to see you. andrew is going to talk about asking for comments. i have a comment from a viewer. >> what was the comment? >> you are right, the broken window theory of stimulation is silly, keynesian economists can't help mistaking capital flows for capital stock. why not destroy all capital so we can rebuild it and call it economic stimulus. net net, it's a redistribution of capital from savers to labor. makes no sense. if you do think about it long enough, does it really make any sense to destroy a city to rebuild it because of the economic? it doesn't. so you don't want to keep doing this. >> hurricane sandy took care of that. >> you really don't. >> and we have to do. we want to do it and any of the positives that come out of it in terms of construction and labor, we'll take it, but because we have to do it, but it's certainly not something -- when i mentioned andrew, i think of you. but now we've got to make sure
because andrew -- until katrina, andrew was one of the worst, named after -- well, not after you. i'm not one of the worst. >> comments, if you've got more comments, shoot us an e-maie-mail e-mail @squawkcnbc.com. and don't forget, we are back to business this morning on wall street. take a look at the futures, which are looking up. also, we have a $2.9 billion fashion deal this morning. the owner of tommy hill figure and calvin klein. we'll talk about that after the break.
welcome back, everybody. we have been keeping an eye on the futures. stock exchange is open as usual today. and right now those stock indexes are indicated higher. the s&p futures up by more than eight points. and the dow futures are also indicated higher, up by about 60 points or so at this point. and again, trading will begin as usual at 9:30 a.m. eastern time. in the meantime, why don't we get an update from pse & g. joining us on the phone is fran sulliv sullivan. and fran, yesterday, when we spoke with somebody else from pse & g, he told us this was the
worst storm and outage you have seen. how many people out of power right now? >> right now, we still have about 900,000 people without power, and that's down off the high. it was about 1.4 million yesterday. we're making progress. therest still a lot of people without power. >> the biggest problem at this point. is it the downed lines? the substations flooded? where are the areas there are the worst problems? or is this across the state? >> it's really across the state. you know, northern new jersey, jersey city got hit hard. you know, we have some flooding and associations there that we're working on right now. but really, up and down the state and it's a combination of the substations and really damage to the wires that we need repair. >> is this a situation where you go out to the neighborhoods, or start at the substations and work your way out? >> you look at the repairs and try to do critical infrastructure first.
hospitals, policeati stations, t type of thing, and then you get the largest number of people back first. in this instance, that might mean going to substations first, reconnecting them, getting that circuit back up. and getting trucks out on the street. getting crews out and making repairs again. getting people back online. >> how long should people expect to be out of power? you're looking at a week, maybe longer? >> right now, we're seeing everyone restored back by monday, by next monday. you can see we were able to store 400,000 or so, 500,000 people. the numbers, hopefully, will keep moving quickly like that in the beginning, but towards the end when we have to go neighborhood to neighborhood, house to house and reattach individual services, you know, people could be looking for next monday. >> this is just a situation that's going to take some time because that's what happens in a case like this, obviously, you have people, you told us yesterday that you had brought in well before the storm hit. so you have full manpower back
on the streets and this is going to take some time? >> it is. and we just ask people to be patient, we're out there and the folks are doing their best and it is going to take time, but we are out there. >> thank you very much, we appreciate your time today and good luck. >> thank you very much. coming up next, we've got earnings from general motors, the numbers and the company's cfo. in just a bit, we have richard lefrac. we're going to talk to him about the conditions there and the news beyond sandy. take a look at futures right now. we've got wall street ready to open for trading after being closed monday and tuesday. gran arrows across the board. nasdaq up close to ten points. "squawk" coming back after this.
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eastern seaboard are in the dark as the wake of hurricane sandy has continued. damage estimates are already in the billions the first day after the storm revealed how disastrous sandy was. jay gray has the latest from new york city. >> reporter: daylight revealed a new jersey shore, riddled with debris and homes ripped from their foundation, the famed boardwalk splintered, and evidence of sandy's wild ride, this roller coaster tossed into the sea. >> the devastation at the jersey shore is unthinkable. >> along the coast, sandy left entire communities under water. >> the road just became a river. >> reporter: residents who rode out the storm. >> within 10 minutes, we had 4 feet of water in the basement. it was unbelievable. >> reporter: stranded until rescue teams could boat them to safety. but in breezy point, it wasn't the water, it was the wind that was a problem. firefighters battling flames pushed by hurricane winds across
an entire neighborhood. >> it looked like a forest fire out in the midwest. the winds were devastating blowing from one building to the next one. >> reporter: in a community of just 5,000, more than 100 homes were destroyed. >> everyone here is very close, and it's a shame. it's so sad. >> reporter: high winds and a record storm surge trcrippled t nation's largest city. water also seeped into the subway system. the work has started to bring the city back. >> sandy hit us very hard. it was a storm of historic intensity. but new yorkers are resilient. >> reporter: resilience, the mayor and millions in the strike zone now know they'll need to recover from the damage sandy left behind. jay gray, nbc news, battery park.
events won't be on the calendar. best buy has canceled an analyst meeting that had been scheduled for today. but due to the storm, no longer taking place. the meeting hasn't yet been rescheduled. investors, of course, anxious to hear how the new ceo is planning to turn it around. we'll see when that meeting gets back on the calendar. we won't be getting the energy department's usual look at oil and gasoline inventories normally released at wednesday 10:30 a.m. eastern. if you're looking for an early winner on wall street today, check out shares of generac holdings. i think both of these folks have generac. >> we do. >> let's get to phil lebeau with earnings on gm. >> hi, andrew. we do have general motors, it is far better than expected than the third quarter. the estimate on the street was
for 60 cents a share. it worked out to about $1.5 billion, revenue almost $2 billion better than expected. couple of numbers to keep an eye on. europe, gm losing $500 million in the third quarter, now expecting to lose between $1.5 billion and $1.8 billion. we're going to hop on the gm conference call in a few minutes to see if they have any more clarity in terms of restructuring. and don't forget, we've have the cfo joining us in about 15 minutes. but again, earning 85 cents a share in the third quarter. >> and phil, we can see in the premarket that stock's up by about 5.25% on this news. again, trading getting back to normal. and you can see reactions to these things, and the knee-jerk reaction is that the stock's up by more than 5%. thank you, phil. >> i don't know if we still have him there. we talked about it a little bit earlier, here's a little more detail. pvh corporation is buying rival
group in cash and stock. the deal uniting the calvin klein branded clothing under one corporate roof. it values warnaco. 34% premium over the recent close friday. warnaco owned the jeans and underwear license for calvin klein, pvh the rest of it. pvh owns tommy hilfiger, calvin klein in totality and talking about making ties for donald trump and p. diddy and a couple of other folks. used to be called -- and they changed their name. >> all of these companies went through massive disruption. we were thinking about warnaco, gone into bankruptcy, that company has changed quite a bit too over the years, used to be one of the biggest makers of bras too, warnaco. >> hmm. >> i was thinking, actually i was thinking about all those -- >> i read a story for the front
page of the "wall street journal" when she was taking on victoria's secret trying to build a better push-up bra. they are the company that invented sizing, a, b, c -- it was invented by warnaco. >> if you were really cool, i don't think you would know this. you'd have to be either a perv or something worse to know all this. >> well, i'm telling you. >> calvin klein, warnaco was behind some of toes racy calvin klein, they pushed the envelope. >> remember those ads? >> i do remember. maybe it was -- maybe i had repressed it. now i do remember, thank you. thank you for that. >> sorry. >> that's all right. your suits are polo, right, not calvin klein? >> polo. >> ralph lauren. >> do you know why i asked him this? >> it's lauren. >> it's lauren.
>> sometimes you say ralph lauren. >> well, you look at them and you wonder -- >> well, there you go. >> i do. the eye of hurricane sandy hit the jersey shore very hard. these pictures that were now -- see we didn't have newspapers yesterday and -- >> if you don't have tv at home, you've not been seeing some of these pictures either. >> the boardwalk is gone. >> boardwalks, businesses, homes, millions without power, president obama's going to survey the damage with governor christie today and kayla tausche spent two days in cape may and moved north on the parkway to atlantic city where the damage is extensive. and she joins us again this morning. hi, kayla. >> reporter: hi, joe. there's definitely evidence of flooding on the buildings. the big question for business here in atlantic city is how to get the casinos rolling again. the casinos in atlantic city, lost about $5 million in collective revenue daily.
and now that's for probably the last five days assuming that most of the city had evacuated and stopped gambling. that's a hefty number especially considering that unlike other businesses, casinos have very small margins and don't make as much money as you think they would. even though the storm hit right as these casinos were going into the slow season in atlantic city that actually the boardwalk has had a tough time against other competitors and this could hurt them even further there. now, with all due hope here, the casinos hope to reopen on thursday. there are a few problems with that, the city's under mandatory evacuation. even if they turn the lights on, who will be able to go there? the second thing, the water here in atlantic city, is unfit to drink. the utility came out and said you can't wash food with it, you can't drink it, you can't wash cuts with the water because the contamination is so strong here.
and we have no word on that going forward. there's still a lot of things that have to be figured out. inspectors are actually coming today to assess the structural soundness of some of these properties. and even if they get that underway, still unclear what's going to happen tomorrow when they try to open their doors. now, caesar's entertainment report earnings after the bell today. so that stock is one that you should watch today. if you're concerned about atlantic city or if you're even looking for any sort of comments about the health of this industry. we're going to be listening closely to that call after the bell today. czr, and we're also going to be watching closely president obama's visit a little bit later today and his tour around with chris christie and what they say about what they've seen on the jersey shore and the extent of the damage here. >> the casinos, you think about them, they are open 365 days a year. has there ever been something where they've been shut down for
this long before? >> reporter: you know, becky, i don't think they've had an event where they've been shut down for this long. during hurricane irene, they were shut down for three days, not only throe days, but in the high season of the summer, it was estimated that the casinos lost about $50 million in revenue over that three-day period. so much greater than what we've seen here. but still, that's their high season, and this is a slow season. and we haven't heard reports of any damage. and people we've been able to speak to say, no, the floors are fine, the machines are fine, there's really no flooding. but it's just, are there going to be people here? are people here actually worried more about -- electricity back. you know, how are you actually going to get people to the casinos? and how long will these effects be felt? >> thank you very much. we'll be watching throughout the day and throughout the morning. when we come back, we'll talk more about the cleanup along the atlantic coast. it is just starting. you've got home improvement
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the devastation of sandy has people working overtime at lowe's. mary? >> reporter: hey, andrew, you can fit 22 football fields inside this distribution facility. which serves 114 stores in six states including a number hit hard by sandy. states like new jersey. this truck is being loaded right now with emergency supplies that are headed for the eastern part of maryland. of course, that part of the state hit very hard by the storm surge from sandy as well as flooding. so it's being stocked with emergency supplies, things like batteries, tarps, gas cans as well as cleaning supplies. these are loaded on the back of
the truck, so it is first off in the area. a kind of logistical lifeboat, if you will. the logistics started early last week in pottsville, while the supply and recovery efforts will last for days. >> we worked some additional hours prior to the storm. people would come in maybe on their off shift, work some extra hours, work some overtime to help prepare prior to the storm. we'll also be doing it post storm now as we go into the weekend. >> reporter: now, of course, lowe's has a long history dealing with hurricane preparation and recovery. so it means it faces few surprises when a storm strikes. sandy's size, the vast area it impacted, and how it impacted those regions differentiates the storm. keep in mind, this facility shipping generators to long island and snow shovels to west virginia. this facility is also reaching out farther and farther to supply the recovery efforts now. it says it's having generators shipped in from california so they can send those along the
east coast. of course sandy also impacted potsville. a number of employees here have been without electricity. so they've had to work around their schedules in order to staff the overtime needed to help with the recovery effort. and also lowe's has been reaching out and putting some of their staff in hotel rooms again because they've been without electricity for a couple of days now. back to you. >> thanks, mary. appreciate it very much. with the ports closed, tankers set to deliver crude are being kept out. and joining us now on the "squawk" news line, the president of marine technologies for mid ocean tanker company and alternative capital management motc's tanker, the american phoenix was scheduled to arrive into new york harbor yesterday to deliver 325,000 barrels of sweet texas crude, but it's still on the way. robert, when is that going to get here? >> right now, we're looking at an eta of the first of november around 0400. the ship has had to stay
approximately 600 miles behind the storm because of the size of sandy. so we're delayed here by two or three days. >> give us an expectation on price of gasoline over the next couple of weeks. >> well, the crude movements will continue up from the east coast out of texas. and gasoline prices may become a little strained, but i don't think the effect of the storm is actually going to send it into any kind of escalation. there'll be plenty of movements that are still there and we've only seen a two or three-day delay. it's all going to depend on the condition of the terminals, which are being inspected now and we're waiting for u.s. coast guard to tell us when they will reopen the port. >> hey, robert, what does it mean to have the american phoenix delayed by two or three days, whatever it ends up in the end, how much does that cost you? >> well, there's obviously an economic impact. it all depends on how the ship is naturally on hire. if it's a time charter or if
it's actually a movement of that oil. this ship is on a time charter. so we're still collecting our charter hire, but the people moving the oil are looking at, you know, significant delays here, which are in the six-figure numbers. >> how many other -- go ahead. >> just quickly. on that, we've been trying to get a feel for what the damage will eventually be for the storm. is that something you take the hit and end up dealing with? or do you have business discontinuation or insurance to cover all that? >> insurance that would take, you know, take an act of god or what would be considered weather delays. but most of the time, the tanker owners or anybody whether it coming in with containers, will take it on the chin. we deal with weather and this kind of movement in transportation every day. >> how many tankers do you think are in the same situation you are right now. >> i'd say probably in new york
harbor dealing somewhere between five to ten tankers looking to see when the port's going to open again. >> otherwise we'll be dependent on people trucking it in right now. >> i think more dependent on reserves that are in the port. and around the connecticut area and into jersey area, more than what's actually coming in at this point in time. i don't think there's any reason that anybody would be that excited about it yet. it's still a minimum delay considering what we're seeing in the ports. >> you guys haven't had any damages and es i terms of the boats being at sea. >> tanker industry is very much safety concern, so no one would ever question us delaying the ship and keeping behind the storm. actually had a departure on the 24th which put her eta around key west the same time that tropical storm sandy was going to start reaching the coast. we all agreed, hold the ship back, let the ship pass and stay significantly behind it, you know, in order to make sure that the ship was safe. she's been safe during the whole
time. >> okay. robert, thank you for joining us this morning. >> thank you. and good luck. >> good luck yourself. >> thank you. when we come back, the cfo of gm will be talking about quarterly results and the outlook for the company. that stock was up 5% right after the earnings came out. we'll take a look and you can see right now up about 3%. "squawk box" will be back after a quick break. bob...
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welcome back, everybody. gm scoring big beats in the second quarter. the auto maker earned 93 cents a share for the quarter, that was well above the 60 cents the street had been looking for. phil lebeau has a special guest joining him to talk more about this. phil? >> thank you, becky, i'm joined by the cfo of general motors joining us on the "squawk" news line first on cnbc. when you look at you guys earning 33 cents more than the street was expecting. >> well, phil, i'd say overall it was a good quarter for us. and a challenging environment. being able to grow revenue, grow profits as you mentioned year-over-year. our margins are up slightly, strong cash flow. got some important launches away this quarter in terms of new vehicles into the market for cadillac and other of our brands. so good quarter overall, and we've made some progress on some of the tough issues in front of us including pensions and we're making reasonable progress in
europe. >> and we'll talk about europe in a bit. but i want to ask you about revenue. nearly $2 billion better than expected coming in at $37.6 billion, how much of that was volume? how much of that was pricing? >> it really split between the two. and i'd point out also there's over a billion dollars of negative impact from foreign exchange in there. so backing that out, the revenue growth's even stronger than initially appears. and really, that's about the vehicles we're bringing into the marketplace and how well they're getting received. obviously we need to lead with product, put the right product into the customers' hands, give them a good value proposition and that's what will drive the top line of the business. >> dan, you lose $478 million in europe, and your guidance now is for full year loss of between $1.5 billion and $1.8 billion. when do we finally see some type of definitive major restructuring, whether it's plant closings or a major reduction in the workforce over
there? >> well, we're going to talk on the analyst call later today about some of the actions that we have taken and will be taking in europe. and the prospect back to break even and ultimately profitability. there are a number of actions we're taking within our control both on the revenue side in terms of the new product launches that we have coming into the marketplace right now and over the coming year or two as well as actions on the cost side and obviously over time we're looking for some sort of stabilization in the european economic environment. >> but will there be a definitive major announcement in the next six months to a year? >> well, you're going to see a fair bit of detail on the call in terms of actions that were taken. you know, so far actions that we plan to be taking in the coming quarters. so there's really a good amount of activity going as i said on the revenue side, on the cost side, capacity reductions, sg & a reductions, other
efficiency actions. there's a lot going on. and you know, we expect to see that show up in the results in the business over the coming quarters. >> dan, one last question, tell us about the impact of the hurricane on your operations in the northeast. particularly the dealerships. how much of that likely to impact sales at least at the end of october? and how long does it last in terms of dealers starting to get back to normalcy? >> well, too soon to make predictions about what it's going to do on a forward-looking basis, but we would expect from the industry some modest impact here around the last couple of days of the month which are important sales days as you know. so we would expect some impact come through. obviously today's the 31st. we don't have a final quantification for that year ourselves, but we expect to be giving people an update on that when we report sales tomorrow. >> dan ammann joining us on the
"squawk" news line this morning. there you have it, gm beating the street by 33 cents in the third quarter. we'll be on that analyst call to see what kind of steps they're announcing when it comes to the european operations later today. back to you. >> while we have you here. you are somebody who does a lot of different services and a lot of different industries you cover. airlines we are hering hearing very slowly we are seeing services brought back to newark and jfk, although it's limited service. what's it mean just in terms of the ripple effects? how big of an impact is this having across the united states at this point? >> a huge impact. it helps that you had d.c., boston, and philly back online yesterday, at a lower rate, and that's going to increase day-by-day. yesterday i talked with folks at u.s. airways, and they believe you'll slowly start to see service ramp up. by the weekend, you should be fairly close to relatively normal operations. this depends on what we see from
laguardia. you saw pictures in terms of the flooded runways, water up to the jet bridge. so i think laguardia's really the key here and how long it takes before that is up and running. there's substantial damage there, including perimeter fence was breached. the instrument lighting system, that was damaged by a barge out in the water there. how long it takes to really get laguardia up, that's what everybody's watching right now. >> phil, do you know off-hand. >> do you know when they are likely to run out of those. do you know how it works? >> well, it goes as long as you use them, joe. i think there's not a time limit on this. >> 45 billion in losses. >> yeah. and they're -- absolutely. that's $45 billion. and that was part of the restructuring announcement.
you're not allowed to bring those losses and carry them forward to report in future years. but when they did the restructuring announcement for the auto makers, that was one of the agreement that was put in there. yeah, they've got a lot of those they can use in the years to come. >> and they make -- i think they had a record profits in 2011 of 2.6 billion. that's a few years, if you've got 45 saved up, so taxpayers -- >> oh, yeah. >> yeah. okay. >> aig. >> absolutely. >> aig same story. >> good deal if you can get it. >> phil, when are you going to be able to get out of atlanta? >> within two hours, i swear i'm going to run to the gate right now. >> good luck. safe travels, and thank you for everything over the last few days, we appreciate it. wall street getting ready for the first day of trading since the hurricane, we are all over the markets this morning. it's good to have -- doing a three-hour show about the stock market with no stock market
is -- two days was enough. that'll be good today. the information about the trading day ahead. "squawk" will be right back. when you take a closer look... ...at the best schools in the world... ...you see they all have something very interesting in common. they have teachers... ...with a deeper knowledge of their subjects. as a result, their students achieve at a higher level. let's develop more stars in education. let's invest in our teachers... ...so they can inspire our students. let's solve this.
going to come out of this better and stronger than before. >> the latest on the destruction in the northeast as homeowners and businesses try to assess the damage from super storm sandy. live updates from new york, new jersey, and pennsylvania. and the latest on the repairs to the electrical grid. >> and traders get ready to get back to business. the new york stock exchange set to reopen after a two-day session, and we will get you ready for the opening bell. the third hour of "squawk box" begins right now. welcome back to "squawk box" on cnbc. i'm joe kernan along with becky kwik and andrew ross-sorkin. updat updates on damage from sandy. and a damage assessment from new
york real estate magnet richard lefrak. also the latest on airline cancellations and airport closings from courtney reagan, and the new york stock exchange reopening today after going dark for two days. not shut down since 1888. >> when there were 40-foot snow drifts in manhattan. >> we're going to get you ready for the opening bell and the rest of the trading week, and we have the adp employment report tomorrow starring mark zandy. first, though, andrew, the person not the storm. >> let's get a check on the markets. at this hour, looking up across the board, dow opening up about 61 points higher, s&p 500 would be higher, nasdaq, as well. >> marginally down day in london, ftse 100, cac up of
6.40, and the dax up, as well. in earnings news, gm scoring a big "b" for the third quarter. if you factor out special items, earn eed 93 cents a share. and cfo dan ammann said the company would provide details of its plan to return to profitability in europe during today's conference call and we will bring you the details as we get them this morning. we're taking stock this morning of the damage from the super storm sandy, and trading is on schedule to resume at 9:30 a.m. eastern. scott joins us now with more on all that. >> good morning, andrew. when you think about what people have gone through in their own lives and what they are leaving behind to come into work today, it gives you a sense of the dedication it's taking to get these markets back running even
after that two-day shutdown. they started arriving before dawn. and before dawn is a daunting thing in this city right now because down here, there is no power. no traffic lights, no nothing. and yet they're coming in, takes a couple hundred people to get the trading floor going. and they expect as you've been saying that they will get the markets open as scheduled. there are a lot of issues beyond that. and, of course, the trading floor isn't nearly as central as it once was. for all they're doing here at the new york stock exchange which never lost power. every firm, every trading desk in the tri-state area here has also to get things going. there you go, some people saying we're back. we're getting open. but it has taken a long time. and the exchange was closed for two days. michael bloomberg will ring the opening bell today.
yesterday, he had high praise for the exchange. >> business in new york city is getting back to normal, at least where there is electricity. the new york stock exchange clearly made the right decision in staying closed monday and today in the interest of safety. >> that was the mayor yesterday, and when you talk about the interest of safety, take a look at some of the real life concerns going on elsewhere in this area. some pictures released by the nypd of rooftop rescues in staten island. staten island was badly damaged by the storm, a lot of flooding, the whole island actually cut off for some time as the bridges were closed. dramatic video of people being rescued from the roofs of their homes, that's the thing they're dealing with. the fact we have the financial markets coming back is a huge symbol, but there's still a lot of cleanup and damage they're overcoming and personal things
to get down here and get capitalism back on track. >> it's a very important start. and i believe mayor bloomberg's going to be there ringing the opening bell, a symbol of getting the city back and running. going to be keeping us up to date on what's happening as we move toward the opening. it's about an hour and a half from now. and thank you very much. that super storm sandy causing widespread destruction across the northeast. it's not just here in new york and the new jersey area. let's talk a little bit about the disaster of economics and what this means for the country. recovery efforts may give a boost to the economy in the long run. joining us right now to talk more about it is austin goolsbee, the former chairman of council of economic advisers and an economics professor in chicago. austan, it's great to see you this morning, thanks for joining us. >> yeah, great to see you. >> we have a lot of estimates
thrown out there. maybe another $30 billion in lost business, something ihs has put out. hurricane sandy could be twice the losses of irene. how do you really get your head around it at this point and try to get a feel for what has happened? >> you know, i don't think it's that easy to get a specific number. it tends to be if you look at the path of these things, they drift up. when all is said and done you add up all the costs to tend to be 1 1/2 to 2 times bigger than the first estimate. we know it's going to be a big number. we don't know what that is. i think what you highlighted a the the top there is the kind of quirk of gdp accounting, which is people whose houses are wiped out are obviously worse off. however, as they go buy things to rebuild their houses, that counts as gdp growth, and you do see kind of a short run kick up
in economic activity. >> what should we expect? when you say the short run, we're talking about before the end of the year? you see that added? >> yeah. you would think, basically if you think how long does it take to rebuild and fix things back to where they were before, that kind of thing is usually within a year. now, before the end of the year, literally over the next one month, that doesn't automatically start to show up right away because you can have disruptive supply chains. you know, you talk to the guy who can't get the fuel into the port. you can have a bunch of complications like that. if the airport is shut down for a long time, that could have a negative impact. but i would suspect over six months, you would likely see what you saw even in the post hurricane katrina or a lot of the big hurricanes. big hit on the capital stock,
but then the economic activity has to bump back up because people have to rebuild. >> we've been talking about it this morning. is there work done in the field of economics the broken window theory. it would help construction when this happens, but how do you see the negative effect? we don't want a lot of hurricanes, don't want to destroy cities just to rebuild them, but there is improvements you make on infrastructure when you put up the new structures. i mean, do keynesians believe this is actually net net a positive eventually? or do we know for a fact -- >> i don't -- usually economists don't think that on net net it's that big of a positive. the only places you'd see a net net positive would be things where there's very substantial let's call it productivity growth you're going to rebuild with some new technology that leapfrogs the past technologies. i think if you go look at the
kind of age of the normal real estate capital stock, it's not so outdated that when you rebuild it makes you better off. in some sense, if this were going to make you better off, then you ought to blow up your own building and rebuild it. >> people make that argument. and it doesn't seem common sense, doesn't seem that it's possible. >> i think it's a little confused. it tends to confuse the gdp is what we think of as a flow. it's a per year number. so, of course, the per year is going to look better if you wipe out your existing just like if you wiped out all your savings. your savings rate's got to go up because you've got to put more in the bank. >> you want to give us a prediction for friday? the bls is working hard to get the unemployment numbers, i should say the labor numbers. what do you think it'll look like? >> two forces separate from
whether they can open the office to get the number out, you've got two things going against each other. last month was a really good number, there was a bounce back either way if you have an extreme number. that might tick up. you've seen moderate progress, you've seen improvement on unemployment claims. so i think most people think it's going to stay steady. i'm going to go out and predict it ticks down a tenth. >> all right. austan, we want to thank you for joining us. we'll be watching those numbers tomorrow. and always appreciate your time. >> happy halloween, guys. >> happy halloween. >> you're in a mark zandy costume today. >> yeah, with the orange tie. >> yeah. he's going to be our -- do you see the big new job he got? i don't know whether he's going to grace us -- you may be the only guy that looks like mark zandy who is on on friday. >> no more on jobs day mark zandy quoting what the adp says.
>> that's right. >> oh, he is. >> he is on tomorrow. >> good. austan, are you on with us tomorrow? >> no, friday. >> friday for the jobs report. we will see you friday. thank you, austan. let's get you caught up on other stories we're following this morning. walt disney buying lucas films, the company that brought the world "star wars," among other things the deal means that new star wars film starting with "star wars episode 7" will be out in 2015. similar to what disney paid to acquire marvel in 2009. pvh buying warnaco group. the deal uniting all the calvin klein branded clothing. warnaco owned the underwear and
jeans portion of the company. that's a 34% premium over the most recent close last friday. still having to deal with friday prices. and potash corporation, the biggest maker of fertilizer in talks to merge with israel chemicals. they have wanted to raise the stake for some time. i don't know if you remember, billiton tried to buy them a few years ago, there was some issues, i believe, a chinese company had been looking at that and there was some big -- not anti-trust issues, but political issues. >> potash, remember the stock was a huge performer. >> huge performer. >> and then it came back down. trying to buy it on the cheap. >> i think the canadians said this is a -- >> look at that. >> this is a natural resource. >> when did you say bhp came in?
>> i thought they came in somewhere -- i thought they came in 2010. >> yeah. >> where it came -- probably was the middle of -- it was down at 30. looks like, i think it split a few times because i remember being up in the 100s or 200s. coming up, assessing the damage from hurricane sandy. the company's readiness for the storm. how the retailer is helping homeowners rebuild and protect their property. and the damage in new york city from richard lefrak.
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welcome back to "squawk box" this morning. home depot stores in the northeast helping people protect and repair their property after super storm sandy. and joining us is home depot's northern division president runs 800 stores across 22 states. and i imagine you have not had an opportunity to sleep over the past couple of days. >> well, first of all, thank you for having me on this morning. last couple of days have been
interesting. our first intention was to figure out the damage across the knead and see how we can help our customers. >> what's open? what's not? >> so as of right now, we've got three stores that are not opened. those stores are primarily in nigh city due to either power grid issues as all of you know in new york city or one location along the coast of new jersey that's still under curfew. so we think we'll have only two, down to two not opened shortly, so we think we're making progress by the hour. >> in terms of product. what do you have in stock? what are you trying to get in stock? >> right now, what we're seeing is increased activity around storm products such as generators, flashlights, pumps, a lot of the flooding that went on. certainly pumps are of primary interest to our customers, batteries, and wet dry vacs to
clean up some of that flood water damage. candidly, we have in the neighborhood of 750 trucks that are either rolling or going to be rolling over the next couple of days into the marketplace. we started as early as yesterday morning shipping products in. and it's been activity -- it's been bustling activity here for the last 24 hours getting product in. so we've seen a lot of activity around those areas. >> we were talking during the commercial break about one of the beneficiaries of these things, the whole broken window theory and whether it helps the economy, you guys are a clear winner. during a period like this, do you compete heavily with a lowe's ore other competitors? is there any pricing pressure at all? i know nobody's trying to gouge customers and you guys have locked in your prices. >> yeah. >> they talk -- >> you say nobody is. home depot. >> i know home depot has locked in its prices. how do you think about pricing in the environment?
>> lowe's. >> as you said, our common practice is to lock in our pricing well before the hurricane hits. >> slam lowe's, lowe's is gouging. say it. >> no, listen, there's a lot of competitors, formidable competitors out there. this is our intention, there's increased foot traffic in our stores right now, but i'd remind you, we had 300 stores in the path of this storm, prestorm, and the activity's not as busy as it is today. we think the customers are our primary focus and that's our intention to help out those communities. >> i'm amazed all your stores were open. >> well, we actually the damage from damage perspective, it's been very minimal. there's been just some broken glass on the front of the buildings. we've had just slight roof damage, little bit of leaking. nothing -- nothing like what we actually saw during irene. >> yeah. do you remember, aaron, in the
northeast -- it's actually in maplewood, but in union, that area. how long was that closed last time? over a week? >> yeah, that building was closed for about 14 days. >> that's what i thought. i tried to go. >> there was a lot of flooding inside that building. and interestingly enough, the water didn't make it into the parking lot this time. >> excellent. that's good. >> aaron, we had asked people on some of these retail sales, something like what you're seeing in terms of people buying generators, people buying wet/dry vacs, what does that mean in terms of same store sales expectations for the month? >> yeah, well, becky, we don't talk about sales during the quarter. i could tell you these are incremental purchases in many cases who folks otherwise they wouldn't have purchased a generator had they not been going through this hurricane. so we think there is some of that going on. there's a lot of increased foot traffic in our stores. but again, i'd stress to you our
intention is to take care of communities. we've had a lot of stores that had little activity the day of and leading up to the hours before the hurricane hit. we feel good about the product we've got rolling and we think we'll be ready to take care of the communities. this is an evolving situation. you all know, we still have the hurricane turning around on the northeast, well, not the hurricane but certainly the storm. we're still assessing damage as it continues to move north. >> thanks for calling in today. good luck with everything you're doing and trying to help these communities. >> thank you so much. >> you bet. when we come back, we'll talk more about assessing the damage from hurricane sandy. richard lefrak will update us on the damage to his buildings in new jersey and new york city. more than 18,000 flights have been canceled due to sandy with more likely to come. courtney reagan will be giving us an update when "squawk" comes right back.
anyway, good morning, courtney. >> you -- >> reporter: good morning, good morning. as you can see, laguardia still very much closed. jfk, newark may be reopening this morning. it's a different story here at laguardia. and it's very critical to the new york city economy. it's just eight miles from midtown manhattan, normally serves about 1,000 flights a day. nothing right here today. take a look at this picture. this picture was given to us today by an airline employee. it shows a tarmac yesterday with water from both of the bays that sandwich laguardia nearly to the jet bridge. unbelievable, but we did look out a window this morning. and however it appears at least in the section that we could see of the central terminal the water has receded. while the port authority says laguardia is still officially closed, there are some airline and airport employees that are here. they're at their post. we spoke to them, they didn't want to be on camera. they did say they were asked to come in to work, but they're not exactly sure what they're supposed to be doing. and there are some passengers here that are sure they're
getting out today. >> i know for a fact this airport is going to open today. because i stayed here monday night. i know it was like a ghost town in here. there are people in here, there's coffee brewing. something's going down today and i'm going to be on the first thing smoking out of new york city. >> reporter: now, port authority says the airport is still officially closed and we spoke to delta this morning, they say they are not flying any airplanes in or out of the airport today. they're working on whether or not they can service laguardia tomorrow. they're going to figure it out and as soon as they know, we'll bring it to you. but once the airport does open, remember, there are 7,000 employees that work here at laguardia, getting them to and from the airport without public transportation in new york city is also going to be a challenge. back to you. >> courtney, i think that passenger may have been a little overly optimistic. you know, another thing we've been talking about is the marathon. it's still set to go. are you still running?
>> reporter: it is. it's still set to go, i was on a media call the other day, they said as far as they can tell, it's set to be run on sunday. the route also appears to be intact. there are some events associated with a marathon beforehand that are going to have to be changed somewhat. but i still plan to run and cross that finish line on sunday afternoon. >> all right. we'll be watching for you and sending you all good thoughts. courtney, thank you very much. >> thank you. when we come back, the new york stock exchange set to reopen today after a two-day shutdown. we've been watching the futures and they have been higher all morning long. oh, hey mike. what are you up to? oh, just diagramming this accident with my state farm pocket agent app. you can also get a quote and pay your premium with this thing. i thought state farm didn't have all those apps? where did you hear that? the internet. and you believed it? yeah. they can't put anything on the internet that isn't true. where did you hear that? [ both ] the internet. oh look. here comes my date. i met him on the internet. he's a french model. uh, bonjour.
welcome back, everybody. trading is set to resume at the new york stock exchange. joining us now with more of what to expect is rick santelli who joins us from the cme group in chicago. are we expecting an orderly transition into this? what do you think? >> well, there's no way i can know for sure, but my own opinion would be i don't think it's going to be ultra volatile.
i understand there's mutual funds under their fiscal year, i understand, simply it's the end of the month. i don't think it's going to be that big of a deal personally. and, of course, you know, we have sympathies for all those involved with regard to the storm. i think that the bigger issue that ought to be looked at moving forward is how to extricate the electronic platform from the confines of whatever it is that impeded the new york stock exchange from being able to run that platform outside of the devastated area, of course. and i really don't understand how the client side of that had an issue. if you sell a product to the public like services to trade equities, i'm not sure why customers would have a problem with that if they couldn't get their own people in, well, don't use the product that particular day. but i would expect it's going to be orderly. i wouldn't look for anything unusual to occur. that would be my call. >> that's my sense too. seems the futures have traded very normally and without a huge amount of volatility through this.
the nasdaq was shut down too. and that was supposedly the electronic exchange. they decided regulators who are weighing in on this with the sec too, was this simply an issue of the manpower? >> well, i do think. and believe me, i'm not an expert in this, bob pisani would be more. but my opinion is, if the nasdaq didn't want to open. all these exchanges, even the s&p futures and the dow futures get dragged into it. it becomes kind of all or none so to speak. and i completely understand that. but i still don't understand in an age of technology what the, you know, i'll give you an example. and this is not casting dispersions on anything in the east coast. here in this exchange with four hours notice, we have an offsite system that could be completely off-site, full clearing, and full electronic trading platforms with four hours
notice. >> what are you talking about? not saying anything going on back here. that was a clear reference of how hard it was to do that back here, rick, wasn't it? >> no, i don't know what the issues are, you read the newspapers, they say half the issues was the clients of the exchanges didn't want them to open. i don't really understand that logic. all i'm saying quite simply is, in an age where brick and mortar is constantly the issue, think bookstores, i don't understand how an epicenter of electronic trading whether it's banks or exchanges, i'm not sure why that can't be separated out from the people side of that. >> it will be now. you know, listening to grasso, saying if one human life -- i understand all that. it makes sense. >> i get all that, totally. it has nothing to do with that. >> but that's covering up the real issue. is that you need to have, you know, it's not necessary that it's in a discreet location. so what's the problem? >> we did talk about how a lot of organizations after 9/11 had
places they could go, the "new york times" "the "wall street journal," new york times had places set up. >> you've got to get them there, and it's so hard. >> and liesman is here, rick. you two guys probably agree that the broken window logic that this could be good for the economy is not -- this is one thing you probably agree on, right, rick? >> listen, we all know it isn't good for the economy. i don't know what else there is to say. >> the people that still argue. for construction and for everything. it's good for home depot, right? >> yeah, i'm surprised home depot didn't trade up given the forecasts. >> but it's bad for so many other things. but you could improve. what about improving the infrastructure? >> that depends. let me go through some of the numbers i got for you guys and talk about this issue at the end. the estimates for the costs are as high as $50 billion as low as $30 billion. it's not clear that any of these
estimates have factored in the total damage that became apparent yesterday. or any of the models that we have are adequate to this unprecedented event. take a look at this graphic. when has there ever been a storm covering a wide swath of the country, populated area. you had snow in west virginia, you had heavy rains all the way over where rick is in chicago, up to maine, power outages. here's what the numbers are right now. air estimates insured estimates in the $7 billion to $15 billion range. zandy says at the outside perimeter, $20 billion in lost economic activity. ihs says $30 billion to $50 billion total. that would put it in the middle. >> this is important, we do need to get right to him. i believe bob pisani is there talking to duncan, and this is very important. bob, take this over, on the morning we're about to open the exchange again. >> good morning, becky.
duncan here. and the floor is buzzing. more people here than i've seen in a long time. how is the opening going to look? >> so far, so good. we're on generator power here, that's no problem. we can operate on that for as long as we need to. the data center is operating on regular power, we never lost power out there. we opened the gateway at 7:30, orders coming in since then, and orders coming in to the matching engines, the systems, and the brokers are up and running too. so far, so good. >> i understand you raised the amount for dmm says they can auto execute at the open. a lot of the big stocks can open automatically. will that make for a smoother open, as well. >> it should. we actually did that thinking as a backup plan in case a lot of people couldn't get to work because maybe they can't get out of their homes. i think you can see we're staffed a lot better than we thought we would be. that may not be necessary, but we had that in as a precaution
to help things get open faster. >> you mentioned the main data center you thought was working fine, but verizon had some damage, some of the people on the floor, of course, use cell phones to communicate with their offices, that's pretty spotty right now. what are you doing to make sure that's going to be functional? >> the cell phone usage is spotty for all of us in lower manhattan right now. also some of the internet connections are slow. so if people use that for their data feeds, that's slow. we've been giving each of the brokers one of our own lines to make incoming or outgoing calls. you've got internet, so i think we're trying to cover them with as much phone and data help we can to help them run their business from down here and i'll give you another update right after the opening, okay? we'll see you then. >> thank you very much. >> guys, i think the most important thing is the connectivity issue is the primary concern they've got. duncan said that to me many times. they want to make sure the main
data center is working. you heard from him, it is. the concern is that act says to the verizon because the substations have been damaged and they're trying to get the land lines in. lots of people down here. here's the main data center right here and these people are trying to make sure the orders are coming in. duncan's leading them off here to have a little bit of a discussion. a lot of people stayed overnight here. larry lebowitz stayed overnight, a lot of the floor traders move around here. and i'll show you some of the people here. a lot of these people were here overnight. one of the designated market makers. and as i mentioned a moment ago, they have raised the threshold to allow for auto execute open. so the way it works now, for most stocks, small stocks, you can auto execute. the designated market maker has to hit a button for a lot of the bigger stocks to physically open the stock. the smaller ones depending on
the threshold 50,000 share open, you can auto execute and automatically match off. they've raised the threshold for that. a lot of the big names, the big stocks in the s&p 500, they'll be able to open automatically this morning. like by computer, essentially. what that's going to do is make a smoother open. remember, the goal here, and i hope you got that from duncan, is a nice, smooth, somewhat boring open. about the volume, i've been asked about the volume. the orders coming in heavier than they were on friday. but a lot of people feel that end of the month demand will be mitigated by if fact that a lot of the trading desks are opening on light loads today. there's some betting that the volume may not be as heavy as a lot of people thought. i'll give you an update about how the connectivity issues are working. >> bob, i don't know if you heard rick right before we came to you. he'd been talking about the questions as to why they didn't
go ahead and open both the nyse and the nasdaq. he pointed out something you pointed out. at the cme, there's another location that wouldn't be affected by anything that takes place in illinois. is there talk about putting back another location that would being as you brought up the other day the same, a mirror image of what used to be down there in brooklyn? is there talk about bringing another set-up like that? >> not going to happen. there was a famous sort of alternative trading floor i called it, but there was a floor that was set up in the case that the nyse floor couldn't operate. it was in brooklyn for many years. when they made that acquisition many years ago, it became the backup plan. i can assure you that's not going to happen. what is going to happen is this, there's going to be a postmortem on this. and what's going to happen is there'll be more regulatory scrutiny about these contingency plans, these emergency plans, and duncan mentioned that
yesterday. maybe we'll talk with him next in the next hour. i anticipate duncan will be back with us. >> but i guess, bob, if that's not going to happen and arca is the backup, is there a sense it would be able to function with or without the floor? they tested it yesterday. >> and their point is that arca is perfectly scaleable. the floor and arca does roughly one-third of that volume, the floor does two-thirds of the volume, it is perfectly scaleable. they didn't open it on monday because of concerns from a lot of the firms about participating in getting their employees in. but there's going to be a lot of discussion on the post pmortem the floor is not available. and that's going to definitely come out of all of this. >> bob, thank you very much. we will check back in with you in just about 19 minutes or so. thank you. >> okay. coming up next, we are going to be talking about how to come to terms with some of the damage
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box." richard lefrak owns buildings in battery park, the brooklyn water front and newport, new jersey, and estimating the damages to those billions -- those buildings. oh, i'm sorry, richard, i said billions, but you are estimating in the tens of millions of dollars. richard joins us on the "squawk" news line. and we've been throwing the "b" word around for total, but in your own case you're talking tens of millions? >> yes, i am, joe. the damage was just insidious because the flooding not only compromised all of the mechanical systems in many of these buildings, but the nature of the salt water as you know is very destructive to metal, electrical systems, and a lot of work will have to be done to make sure they get restored properly. >> who do you insure with mostly, richard? >> well, i think everybody has to do the primary insurers with the national flood insurance program.
>> right. >> and we have different insurers. i think we carry somewhere in the neighborhood of $250 million to $500 million of excess coverage on this. so we have plenty of insurance coverage. but, you know, the primary layer is with the national flood insurance program, it always is. >> what's your deductible? >> i don't -- i don't think -- we don't have a big deductible in this instance. >> but you and your -- your guys, your employees, you've probably been, you know, getting no sleep, like first responders almost. >> yes, i spent yesterday -- i was up most of the evening the night before talking to my staff. yesterday i actually went down and toured 30 of my buildings. and made a decision to stop all my other construction sites. and take all my labor, all my assets that i could and deploy them in the buildings that had to be restored and remediated.
>> richard, what are you going to do in terms of not fixing the current buildings. are there steps you'll have to take going for the future? to the extent you worry about another storm surge. >> once burned, twice shy. so i think lots of what we're going to do now is rethink what the parameters that we used in designing some of these properties. now, remember, most of the parameters were fed to us by the federal government. fema establishes the floodplain level in new york. and that floodplain level was established at 11, which was -- they concerned to be the 100-year flood. >> right. >> so everything that we've done in the last 30 years has been built to that standard, meaning that the ground floor of these apartments or all the buildings was at 11 and at the utilities were higher than that. >> and the storm surge was 13? >> right. there you go.
kick that theory and try something else. >> so people, it's a sickening feeling. how did you feel in touring these places? >> i feel terrible. yesterday i was visiting apartment houses that we have. and they're high-rise buildings, you can have 350 or 400 families living in an apartment house, the entire ground floor is obviously destroyed by the flooding. and, but the people have no elevated servers, they have no power. you need to get water up to the floors using the electrical system because it's pumped up. and so, you know, it's a very, ve very bad feeling. and what you can do to immediately alleviate that hardship. and that's why we've decided to do is to drop everything else we're doing and bring all my staff, my construction people and move them to the places that need it the most. and it's -- it's all over, it's
not just located in new york harbor. there's been a storm sewer backup in new york city. i have seven buildings where the ground buildings are under water, the heating systems are compromised. it's a tremendous problem. and it all runs all the way up to 57th street where mr. barnette has his crane dangling a block away from my office buildings and my tenants are going to have problem getting access. the streets are blocked off. >> all right, richard. best of luck, best wishes, and we hope to talk to you again soon. thanks for giving us your analysis today. >> good talking to you, joe. nice speaking to you. >> bye-bye. all right. when we come back, the markets are set to start trading on a regular schedule today. >> we're going to head down to the new york stock exchange with more on what to expect on the opening bell. they're all standing by. we'll talk with them in a minute.
you recommended that only a month ago and they bought it. >> september 18th. he spent 2.9 billion and it's more creative than i thought. the divisions that he runs of calvin klein, jeans and underwear, remarkable underperformer. it's a huge win. stock up gigantically. >> now they can wear a shirt. >> they have the whole top to bottom outfit. this is just a total win. you remember tommy hilfiger is why they had growth. starting to run out of growth. >> what's the vibe down there in terms of volume and a sense of
being back in the building? i saw tweets and pictures of darkness around the new york stock exchange. >> it's tough to illustrate right here from here from our cameras because this building is the only building that is lit for a two or three-mile square radi radius. they loaded fuel trucks. 48 hours on a single truck of fuel. reloaded in necessary. you heard about connections that will affect internet trading. it will be interesting. when you trust the infrastructure as you trade will be on the back of traders' minds. >> it will. trading will be as smooth as possible. we expect it will be. we'll be here at the open to see. >> all hands on deck since early this morning. we walked into the exchange at 6:30 this morning and there were
more people here at that time -- as many people here as there are at 8:30 on a typical trading day. everyone is here really getting ready. this is truly an oasis in downtown manhattan. the only building to have any power or light. >> it has a "i am legend" feel. >> you come from downtown to uptown which is business as normal. you pass 34th street and you are in a completely different world. >> you all came in really early today. obviously that's something you had to do for today for the first day back up. there are stories out there saying that bumper to bumper traffic is worse than a normal day on a lot of highways in new york city at this point because so many people are trying to come in and mass transit is down. i wonder what that will mean in the next few days and maybe even the next few weeks as there are
still so many problems with public transportation. >> you have police directing traffic at any traffic intersection south of 14th street because there are no traffic lights. i would say the mix of traffic downtown is fuel trucks, cops and cabs. that's pretty much all it is. >> and, cramer, you see apple going by with a five handle at the bottom. >> this is one of those where it is a football team/baseball team. you have management turmoil people presume the worse even if people who are axed should be axed. this is one of those moments where apple is in a big funk and whatever they do is interpreted as negative. >> great to see you down there. great to see trading begin as normal. we'll see you in a few minutes when we come back. as we mentioned, trading set to restart after a two-day shutdown. we'll bring you stock stories ahead to watch ahead of the opening bell. this is america.
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